Politics

December 29, 2013

Outcome of trade talks splits state

A proposed new international agreement has implications for Maine companies that compete with and sell to Asia.

By Kevin Miller kmiller@pressherald.com
Staff Writer

WASHINGTON — Maine companies that sell more than $600 million worth of products to Pacific nations are awaiting the outcome of secret talks on a new international trade agreement that could affect jobs as varied as fabricating computer chips and processing lobster.

click image to enlarge

New Balance, which manufactures athletic shoes in Maine, is the only shoe company in favor of tariffs.

2002 file photo/The Associated Press

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Maine wild blueberries are ready for harvesting at the Dolham Farm in Warren in this file photo. The state's growers would likely benefit from the elimination of trade tariffs.

2012 file photo/The Associated Press/Robert F. Bukaty

Additional Photos Below

Negotiators from the Obama administration and at least 11 other nations are expected to gather in January to try to complete work on the Trans-Pacific Partnership, aimed at stimulating trade in countries that account for 40 percent of the global gross domestic product.

In Maine, companies that have a stake in the deal disagree on its potential impact – in part because the details are being held in strict confidence by negotiators, as is normally the case when trade agreements are pieced together. But such pacts generally eliminate tariffs and other artificial barriers. That means some Maine companies will enjoy access to new markets, while others face the risk of losing out to foreign competition.

Where Maine businesses fall on that spectrum could depend on what sort of goods they are selling.

New Balance, which manufactures athletic shoes, continues to warn – with support from Maine’s congressional delegation – that eliminating import taxes on footwear made in Vietnam would threaten jobs at production plants in Maine and Massachusetts.

“Our issue remains one of the major sticking points, and frankly we think that is a good thing because it is getting a lot of attention,” said New Balance spokesman Matt LeBretton. “But we don’t know how it is going to play out.”

For those working in Maine’s nearly $500 million fishing industry, however, the agreement could open up new, largely untapped markets in Asia.

“The European markets have been tough for the past few years, so this is great timing,” said Colleen Coyle, seafood program coordinator with Food Exports USA Northeast.

Most members of Maine’s congressional delegation remain skeptical that the Trans-Pacific Partnership will benefit the state, which has witnessed an exodus of manufacturing jobs amid globalization in recent decades. Those kinds of concerns underscore the political challenges the trade deal could face in Congress.

Sen. Angus King, a former two-term governor, said he has been skeptical of the way the U.S. has negotiated trade agreements in the past, adding, “I don’t think we have struck a particularly good deal for Americans.”

Like other members of the delegation, King voiced particular reservations about the Trans-Pacific Partnership’s impacts on New Balance.

“I wish they would say, ‘We are not going to undercut American jobs in that way’ and make this a non-negotiable item,” King said. “But the (trade) ambassador and the Obama administration have not said that, ... and my experience is if people have good news for you, they generally tell you.”

FIVE NEW MARKETS AT STAKE

The Trans-Pacific Partnership is the latest and perhaps the most ambitious free trade agreement ever negotiated by the United States. Eleven other nations are participating: Canada, Mexico, Australia, Japan, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and Brunei. South Korea has also expressed interest in joining the negotiations – as has China to some extent – but the process may be too far along for such major entries.

The United States already has trade pacts with several of the nations, including Canada and Mexico under the still-controversial North American Free Trade Agreement, or NAFTA. Supporters say the new pact could open up another five markets in the Asia-Pacific region, with the addition of Japan, Malaysia, New Zealand, Vietnam and Brunei.

Maine exported $603 million in goods to the five nations in 2012, according to a state-by-state breakdown by the trade consulting firm Trade Partnership Worldwide, which produced a report showing the benefits of the proposed trade agreement.

(Continued on page 2)

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Additional Photos

click image to enlarge

A Fairchild fabricator inspects a wafer at the plant in South Portland. Semiconductor manufacturers do a lot of business in Asia and should benefit from the elimination of tariffs.

2003 Telegram photo/John Patriquin

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A sternman holds a lobster caught off South Bristol. America's commercial fishing fleet and seafood dealers favor a trade agreement because Asia is a booming market.

File photo/The Associated Press/Robert F. Bukaty

 


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